Beijing recently approved a tranche of new biotech crop varieties and announced plans to accelerate breeding to boost yields – the latest chapter in a long-running drive for greater self-sufficiency. The effort has left China better prepared to weather a new trade conflict, analysts say, but the country faces an uphill battle to cut longer-term import reliance.
In the final days of 2024, China green-lit five new GE soybean, wheat, corn and rice varieties and 12 types of GM crops. Days later, Reuters reported that the agriculture ministry would accelerate breeding for new soybean and corn varieties and prioritize improving yields in five key crops: corn, rice, wheat, soybeans and rapeseed.
China has sought to strengthen its food security for decades. But its focus has expanded since the conflict that defined then-President Donald Trump’s first term, Wendong Zhang, assistant professor at Cornell University, told Agri-Pulse. The latest moves are part of a new effort to shore up domestic production of crops that may be vulnerable to trade shocks, he added.
“They are anticipating, potentially, turmoil,” Zhang said. “They are also becoming more and more careful to think about what is the specific reliance on U.S. products.”
Beijing has taken a more sophisticated approach to food security in the last decade, Zhang said. In the 2010s, efforts aimed at increasing production acreage but the central government is now focused on lifting yields with hybrid or gene-edited crops and more effective land management.
In an action plan released last year, China’s State Council set the target of improving grain yields by around 8% on 2023 levels to secure more than 50 million tons of grain by 2030. As part of its efforts to strengthen self-sufficiency, Beijing launched nationwide campaigns to reduce demand for specific crops by cutting food waste and reducing soybean meal content in animal feeds.
China is better prepared for a new trade conflict
The self-sufficiency drive leaves China less exposed to trade shocks in some commodities than in 2018 when it retaliated against Trump’s tariff hikes by slapping new duties on U.S. ag exports.
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The country’s pork sector, for example, emerged from a 2018-2021 African swine fever outbreak more concentrated and has rolled out new productivity-boosting technologies, Zhang said. Chinese pork imports from major exporters have been falling since 2020, according to USDA.
Efforts to reduce soybean content in animal feed have also reduced demand for the U.S.’ largest agricultural export to China. In 2018 soymeal made up 16.4% of feed formulas. By 2023 this had fallen to 13%, according to Rabobank research. Stephen Nicholson, global sector strategist for grains and oilseeds at Rabobank told Agri-Pulse China could further reduce that ratio.
Stephen Nicholson, the global sector strategist for grains and oilseeds at Rabobank.“They're in a much better position,” Nicholson said.
China has been stockpiling soybeans over the last few years, Nancy DeVore, CEO and managing director of DHF Team — an agricultural economic analysis firm — said during an International Food Policy Research Institute webinar this week.
“They're coming into a potential trade war with the new administration in the U.S. with a much larger — like seven or eight times larger — stock of soybeans than what they had going into the previous trade war,” DeVore said.
China’s wheat, rice and maize stocks are also significantly above their 2017 levels, according to USDA data.
Further, Brazil, the world’s largest soybean exporter, has expanded export capacity from around 120 million metric tons to around 160-170 million metric tons, Nicholson said. During Trump’s first term, China ramped up soybean purchases from Brazil; the additional export capacity will further contribute to China’s ability to weather a trade conflict with the U.S., analysts argued.
“That gives the Chinese a lot more comfort,” Nicholson said. “That runway is longer.” A longer runway, he added, could strengthen Beijing’s hand in any negotiations Trump may undertake.
“That puts more pressure on U.S. agriculture to respond, because we don't want to lose that market completely,” he said.
China will remain reliant on imports
The medium-term outlook, analysts told Agri-Pulse, is favorable to exporters serving China. Even with targeted efforts to lift yields, agricultural producers face major hurdles and start from a low baseline, leaving the country reliant on significant imports for the foreseeable future.
The cost to grow soybeans in China, for example, is 1.3 times higher than in the U.S. and the yields are around 60% lower, Genevieve Donnellon-May, a food security researcher at Oxford Global Society — a United Kingdom-based think tank — told Agri-Pulse.
Chinese corn yields show a similar deficit, according to UN Food and Agriculture Organization data.
Accordingly, imports will retain their price advantage for some time to come, IFPRI's Joe Glauber, a former USDA chief economist, told Agri-Pulse.
“There's a lot of economic pressures to import,” Glauber said. For grain in particular, stocks are often kept far from animal-producing regions. “It oftentimes is more economic to import than it is to transport a grain from faraway places.”
As a whole, the country is becoming more dependent on international trade, not less, according to the Mercator Institute for China Studies.
Even meeting its yield targets will be challenging, Donnellon-May said.
The country faces soil and water quality issues as its land and waterways have been severely polluted — in part by heavy fertilizer use. Beijing is working to address the issue through pollution prevention plans, soil surveys and water quality guidelines, but Donnellon-May said the issue remains an ongoing challenge.
The agricultural sector is also plagued by an ongoing labor crunch as increasing urbanization strips rural areas of their prime working-age population, Zhang said.
Wendong Zhang, an assistant professor at Cornell University.Furthermore, China is at the forefront of the impacts of climate change. China’s average temperature is rising faster than the global average and it remains particularly vulnerable to floods, droughts, and typhoons. In 2021, for example, Henan province, a major agricultural region, experienced extensive flooding. The Yangtze River basin has also seen drought in recent years. A population skeptical of genetically modified crop varieties is also slowing the adoption of agricultural biotechnology. Surveys show only around 12% of the public would choose to buy food from GM crops.
The Chinese government is pushing ahead with implementation of its agricultural biotechnology plans — in stages to minimize backlash — but securing public buy-in will remain a challenge, Donnellon-May said.
“The Chinese people are not very interested in GM crops or GM food,” Donnellon-May said.
But not necessarily U.S. exporters
China’s drive for greater food resilience, as President Xi Jinping has said, is also a national security pursuit. Even if the country retains reliance on imports, Donnellon-May argued that it will likely reduce imports from the U.S. and western countries and divert supply chains to its allies.
“China will consider, perhaps, importing more quantities where possible, from Belt and Road Initiative countries as well as so-called China-friendly countries,” Donnellon-May said, referring to Beijing’s signature vehicle for investing in foreign infrastructure projects.
Donnellon-May pointed to rising corn and soybean purchases from Brazil in recent years as the beginning of a trend.
“Beijing has been moving away from western exporters like the U.S., Canada and Australia and looking towards central, eastern European, as well as central Asian and other agricultural exporters to get around any kind of geopolitical tensions,” says Donnellon-May.
Will Beijing’s food security push impact the U.S.? “It already has,” she said.
